India’s third-largest liquid seaborne logistics company Seven Islands Shipping Ltd, which counts private equity firm Wayzata Investment Partners among its backers, has received the Securities and Exchange Board of India's (SEBI) nod to float an initial public offering (IPO).
Mumbai-based Seven Islands, which received regulatory approval on 10 November, is the 40th company to receive SEBI's approval for a public listing this year. It filed its draft prospectus with SEBI on 29 September.
The public issue will comprise a fresh issue of shares worth Rs 200 crore, besides a secondary market sale of shares worth Rs 250 crore by Wayzata and the company's promoters, according to the draft prospectus.
Wayzata has so far invested $80 million in the company, according to VCCEdge, the data research arm of VCCircle. It currently holds 19.3% in the seaborne logistics firm, and will make a partial exit through the IPO. Seven Islands' promoters Thomas Wilfred Pinto and Leena Metylda Pinto, who own 63% and 10.6% in the company, respectively, will also sell part of their holdings.
Edelweiss is the sole merchant banker managing the IPO.
Seven Islands Shipping
The company transports crude oil and related products such as white oils, black oils, and lube oils, apart from liquid chemicals.
All its 12 vessels are registered in India, and operate as Indian-owned vessels. As opposed to Indian-owned but foreign-flagged vessels, these have the first right of refusal in any tender by an Indian company for transposition of oil and other liquids.
Of the IPO proceeds, the company plans to spend Rs 184.05 crore on purchasing a very large crude carrier (VLCC) on the secondary market. It will also spend part of the proceeds for general corporate purposes. The company will not receive any proceeds from the offer-for-sale by shareholders.
Seven Islands primarily operates along the Indian coast, in the Arabian Gulf and Southeast Asia. It counts Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Oil Corp Ltd among its key customers.
Seven Islands, incorporated in May 2002, began operations with a single vessel and a total deadweight capacity of 6,009 tonnes in fiscal 2003. It currently owns and operates 12 vessels with a total deadweight capacity of 900,558 tonnes. Its fleet includes two small vessels, seven medium-range vessels, two Suezmax vessels and one VLCC.
The company reported a consolidated net profit of Rs 106.97 crore for FY17 on a revenue (from operations) of Rs 381.39 crore. Revenue stood at Rs 295.04 crore in FY16 and Rs 158.32 crore in FY15, seeing compounded annual growth of 55.2% over the three years. Net profit has risen at a compounded annual rate of 56.5% over the same period. It stood at Rs 94.25 crore in FY16 and Rs 43.7 crore in the year prior.